2001 SESSION

01-2255

10/01

HOUSE BILL 1371-FN-A-LOCAL

COMMITTEE: Education

ANALYSIS

This bill changes the definition of an adequate education for the purposes of determining state aid to school districts. This bill also provides for an additional local education tax relief grant for certain municipalities whose local school tax rate is greater than the statewide average school tax rate.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

01-2255

10/01

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand One

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Department of Education; Policy. Amend RSA 21-N:1, II(c) to read as follows:

(c) The paramount goal of the state shall be to provide [an adequate education for all school-age] children in the state with an adequate education, consistent with RSA 193-E.

2 Education Property Tax Rate. Amend RSA 76:3 to read as follows:

76:3 Education Property Tax. An annual education property tax at the uniform rate of [$5.80] $6.00 on each $1000 of the value of taxable property is hereby imposed on all persons and property taxable pursuant to RSA 72 and RSA 73, except property subject to tax under RSA 82 and RSA 83-F.

3 Utility Property Tax Rate. Amend RSA 83-F:2 to read as follows:

83-F:2 Tax Imposed. For taxable periods beginning April 1, 1999, a tax is imposed upon the value of utility property at the rate of [$6.60] $6.00 on each $1000 of such value, to be assessed annually as of April 1, and every year thereafter, and paid in accordance with this chapter.

Source

4 Adequate Public Education; Policy and Purpose. Amend RSA 193-E:1, I and II to read as follows:

I. It is the policy of the state of New Hampshire that an adequate public elementary [and secondary] education shall [provide all] prepare students [with the opportunity] in grades 1 through 8, including readiness programs to acquire, through further study and experience, the knowledge and skills necessary [to prepare them] for successful participation in the social, economic, scientific, technological, and political systems of a free government[, now and in the years to come]; an education that is consistent with the curriculum and student proficiency standards specified in state school approval rules and New Hampshire curriculum frameworks.

II. Respecting New Hampshire's long tradition of community involvement and local control, it is the purpose of this chapter to ensure that appropriate means are established to provide an adequate education [through an integrated system of shared responsibility between state and local government] in order that students will be appropriately prepared to take full advantage of additional educational opportunities offered within their communities. In this system, the state establishes, through school approval and student proficiency standards and curriculum guidelines, the framework for the delivery of educational services at the local level. School districts then have flexibility in implementing diverse educational approaches tailored to meet student needs.

5 Criteria for an Adequate Education Clarified. Amend the introductory paragraph of RSA 193-E:2 to read as follows:

An adequate education shall [provide all] prepare students [with the opportunity] in grades 1 through 8, including readiness programs, to acquire through further study and experience:

6 School Money; State Aid; Definitions. RSA 198:38 is repealed and reenacted to read as follows:

198:38 Definitions. In this subdivision:

I. "Municipality" means a city, town, or unincorporated place.

II. "School district" means school district as defined in RSA 194:1 or RSA 195:1.

III. "Elementary school" means a school with any of the grades 1 through 6, including readiness programs.

IV. "Base expenditure per pupil" for each school district that operates an elementary school means the amounts as determined in accordance with RSA 198:40, I(a).

V. "Average base cost per elementary school pupil" means the amount as determined in accordance with RSA 198:40.

VI. "Average daily membership in attendance" means average daily membership in attendance, as defined in RSA 189:1-d, III, for children in grades 1 through 8, including readiness programs.

VII. "Average daily membership in residence" and "resident pupils" mean the average daily membership in residence, as defined in RSA 189:1-d, IV, for children in grades 1 through 8, including readiness programs.

VIII. "Adequate education cost" means the amount calculated for a municipality in accordance with RSA 198:41, I (a) and (b). In a cooperative school district, the adequate education cost shall equal the sum of the adequate education costs of the municipalities whose pre-existing school districts constitute the cooperative school district.

7 Education Trust Fund; Purpose Added. Amend the introductory paragraph of RSA 198:39, I to read as follows:

I. The state treasurer shall establish an education trust fund in the treasury. Moneys in such fund shall not be used for any purpose other than to distribute adequate education grants to municipalities' school districts pursuant to RSA 198:42, to provide local education tax relief under RSA 198:42-a, and to provide education property tax [hardship] relief under RSA [198:55] 198:57. The state treasurer shall deposit into this fund immediately upon receipt:

8 Adequate Education Cost; Statewide Cost. RSA 198:40 is repealed and reenacted to read as follows:

198:40 Determination of Per Pupil Adequate Education Cost.

I. For the biennium beginning July 1, 2001 and every biennium thereafter, the cost per pupil shall be established using the following formula:

(a) The department of education shall calculate the base expenditure per pupil for each school district that operates an elementary school by subtracting from the total expenditures at the elementary school level, tuition to other school districts or approved educational programs, capital costs, transportation costs, adult/continuing education and community services costs, and federal revenues not otherwise deducted. For each school district, this amount shall be divided by the average daily membership in attendance at the elementary school level to attain the base expenditure per pupil.

(b) The department of education shall calculate the average base cost per elementary school pupil by multiplying the base expenditure per pupil of each school district by the average daily membership in attendance in grades 1 through 8, including readiness programs, in that district, and add the results across all such districts. This sum shall then be multiplied by .8 and the result divided by the total average daily membership in attendance in those grades.

II. For each fiscal year, the statewide cost of an adequate education shall be calculated by multiplying the average base cost per elementary school pupil by the total statewide average daily membership in residence of students in grades 1 through 8, including readiness programs.

9 Determination of Adequate Education Grant. Amend RSA 198:41, I(a) and (b) to read as follows:

(a) Multiply the average base cost per [pupil of an] elementary school pupil by the [weighted] average daily membership in residence for the municipality;

(b) Add to [the product of] the amount calculated in subparagraph (a), [70 percent of the municipality's apportioned transportation cost] $1000 for each resident child in a public kindergarten program in the municipality;

10 New Section; Local Education Tax Relief Grant; Appropriation. Amend RSA 198 by inserting after section 42 the following new section:

198:42-a Local Education Tax Relief Grant; Appropriation. In addition to adequate education grants as determined under this chapter, the sum of $50,000,000 is hereby appropriated annually from the education trust fund established under RSA 198:39 for the purpose of tax relief for municipalities whose local education tax rate is greater than the statewide average education tax rate. The governor shall draw a warrant for said sum out of the education trust fund. The distribution shall be determined by the department of education as follows:

I. Determine each eligible municipality's distribution factor by:

(a) Subtracting the amount of the adequacy grant determined in RSA 198:41 from the municipality's total local public school budget for the year and dividing the difference by the equalized valuation for the municipality.

(b) Calculating the statewide average of all municipalities of the results in subparagraph (a).

(c) For any municipality whose result under subparagraph (a) is more than $1 greater than the result under subparagraph (b), dividing the municipality's result under subparagraph (a) by the result under subparagraph (b). The result is the tax distribution factor for the municipality.

(d) Divide the municipality's average daily membership in attendance in grades 1 through 8, including readiness programs, by the statewide total of all municipalities such membership in attendance. The result is the student distribution factor for the municipality.

II. The department of education shall distribute local education tax relief grants for each municipality by determining the lesser of the amount required to reduce local education taxes to the statewide average under paragraph I(b) plus one dollar or the amount found by multiplying its tax distribution factor by its student distribution factor and by the sum appropriated under this section. The grants under this section shall be made using the same distribution schedule utilized for adequate education grants under RSA 198:42, I.

III. The grants received by a municipality under this section shall be used solely for the additional education expenditures authorized under RSA 198:43.

11 Adequate Education Expenditures; Reference to Grades Added. Amend RSA 198:43 to read as follows:

198:43 Additional Education Expenditures. School districts are authorized to develop educational programs in grades 1-8 beyond those required for an adequate education or as required for other grades and to raise and appropriate amounts necessary for such programs.

12 Duties of Department. Amend RSA 198:44, I to read as follows:

I. The department of education shall, on or before September 30 of each year, collect from the school districts final data concerning all aspects of student attendance for the school year ending June 30 of that year necessary to establish the average daily membership, average daily membership in residence, [and weighted average daily membership in residence,] including the municipality of residence for each pupil for that year. The department of education shall submit a report by December 31 to the speaker of the house of representatives and the senate president to be used for purposes of determination by the legislature of the appropriation to the education trust fund. A copy of such report shall, at the same time, be given to the department of revenue administration.

13 Maintenance of Local Control; Reference to Weighted Deleted. Amend RSA 198:48 to read as follows:

198:48 Maintenance of Local Control. Distributions under RSA 198:42 depend only on [weighted] average daily membership in residence and the per pupil adequacy cost amounts as determined in this subdivision and are independent of how the municipalities decide to spend the distributions or other funds they may raise for education. Notwithstanding any other provision of law, nothing in this subdivision is intended in any way to limit or control how school districts operate or spend their budgets except that adequate education grants must be expended for educational purposes. Adequate education grants and hardship grants shall not be considered unanticipated funds under RSA 198:20-b.

14 Effective Date. This act shall take effect April 1, 2002.

LBAO

01-2255

Revised 11/21/01

HB 1371 FISCAL NOTE

FISCAL IMPACT:

METHODOLOGY: